Russians don’t give up that easily

Good morning!

Overnight markets are marginal as I type (at 0445am PST) but that’s expected to my way of thinking.

Here’s my playbook.

1 – Russians don’t give up that easily

The markets rose yesterday on news that Russia was pulling back a few tanks from the Ukrainian border but almost completely skipped over the fact that the Duma called for Putin to recognize breakaway Ukrainian regions as independent.

Two things:

1. There’s been no verification that tanks and troops are pulling back. In fact, I’ve seen two uncorroborated NATO reports this morning that the numbers are going up.
2. The Duma asking this merely substitutes one threat for another. It’s a classic Russian negotiation tactic. What’s more, it creates a pretext for an invasion if the suddenly “independent” Russians in the region are attacked or persecuted.

Russians don’t give up that easily … ever. To a point I made with the super savvy Maria Bartiromo this morning on Fox Business Network, “there’s something else afoot.” (Watch)

Puts are comparatively cheap after yesterday’s rally; so are inverse funds. But I don’t expect either to remain that way for long.

2 – Not outta the woods yet with the Fed

Fixing inflation is not rocket science. First, rein in the Fed. Second, stop spending. And third, reform welfare.

The problem is that the Beltway Bandits are more interested in votes than they are in helping the American people. Sad, sad state of affairs no matter how you cut it.

People are fighting about how many hikes when it’s the speed of increase that matters.

I am very concerned by the number of trial balloons being floated by various Fed officials recently about the number of hikes, the notion of 25 versus 50 basis points etc.

Why?

Because it reminds me of the Bond Massacre of 1994. People who forget their history are doomed to repeat it or so goes the saying. (Read)

Tread lightly!

3 - Retail numbers: what to do now

Inflation will have an impact but the time for selling has passed. Now’s the time to focus on adding to companies you may have missed the last time around. And, to swoop in if great names get put on sale. (Watch)

4 – Texas rips Meta but it won’t stop there

TX AG Ken Paxton ripped Meta/Facebook for stealing users' information and causing irreparable damage. This is a big one and should not be underestimated because the AG is speaking to deceptive trade practices over a decade. (Read)

That’s legalese for Texas is “gonna stomp all over you, Zuck.”

Short or avoid.

And on a related note, get ready if you hold Alphabet. If the Texas AG can get to El Zucko, he can certainly get to Alphabet.

5 – Walmart’s coming for you Costco

Walmart is on deck. I think the company will report strong numbers even though I expect lots of inflation/supply talk. The company is hatching an advertising business that may be worth $3 billion or more. The company is also brazenly hatching plans to take on Costco. (Read)

The time to buy is when there are great numbers but people have given up.

Bottom Line

People tend to make the financial markets complicated which is great if you’re interested in sounding sophisticated.

Keep in mind that the world’s most successful investors and traders succeed because they make things stupid simple.

You got this – I promise!

Keith